If you are in the trading sector or new to Forex you may well be confused with all the different types of regulation out there.
Why is regulation a good thing?
Put simply there is a drive to help traders minimize their losses by reducing the leverage (amount you can gamble effectively).
So the consensus is that as so many traders, especially beginners, lose, it is a good thing to help them minimise exposure to leverage and ultimately the amount of money you could lose.
So where is the problem (how is it abused)?
As there are now so many jurisdictions and choices to be regulated from, CySec, FCA, BaFin to name a few.
Many brokers become regulated in various areas so they can say they are regulated by various entities and therefore add an air of credibility so they can affiliate themselves with the regulatory bodies on websites and promo material.
Some of the famous regulators such as CySec, BaFin and the FCA require brokers to have very large compensatory funds and stop brokers from offering high leverage to their clients on their tradeable assets.
The problem is that as a new client, you are only covered by the entity (jurisdiction) that you signed up to.
The reality of broker regulation (how so many are misguided)
The reality is that brokers with many different regulatory entities are very often signing people up into one of their less regulated jurisdictions leaving the new client/trader exposed to lack of investor compensation and also more tricky and complex sign up processes that can leave the client exposed to undue risk and lack of transparency.
Do you need to sign up to highly regulated Forex brokers?
To be honest, this really is up to you. If you seek leverage and protection, then you will not find the leverage that you seek from the well-known regulatory options. This is because they try to protect clients from heavy losses and usually put a stop to offers and giveaways used to lure clients to open an account.
That said, if you are happy to accept a sweetener or gift to start your trading experience and open to high leverage but still want some protection, you do have choices…
A safe broker with flexibility?
4xCube is an example of what is termed an offshore (though not correctly termed) broker. Their trading license is from the Cook Islands and offers €20,000 investor protection fund from the Financial Commission, meaning your money is protected to a sizeable amount.
They also work hard to push very fast executions trades and ensure that their technology is of the highest standard benefiting the traders that work with 4xcube.
Why is technology important?
At 4xCube you get your very own free VPS, Full STP and truly outstanding trading conditions due to continual and significant investment in the best trading technology available.
Very flexible IB plans
4xCube works with a wide range of introducing brokers and truly offers very good options in this situation.